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Thursday, July 21, 2016

The action by the United States Department of Justice

Salleh Said Keruak

The announcement by the United States Department of Justice has created quite a bit of confusion basically because while there were some references, the details were not complete. What many appear to have missed is that this is a civil action and not criminal action although this does not mean that later it cannot also extend to criminal action if enough evidence of criminality is procured.

From our understanding the action currently being taken is based on complaints made by a third party or certain people aligned to Tun Dr Mahathir Mohamad, who are not actually the aggrieved party. Under US law, however, class action suits are allowed and the complainant can claim locus standi merely by virtue of the fact that he or she is a Malaysian citizen.

The aggrieved party in this case would be 1MDB and the US said it is taking action based on money stolen or illegally transferred from 1MDB. Therefore, if any assets or money are confiscated in the US, then under that money would be returned to 1MDB. The problem here, though, is that 1MDB itself has said it has not lost any money or no money has been stolen from it.

If the US had chosen criminal action then the burden of proof would be on the prosecutor to prove guilt. In this case they have chosen civil action and after freezing or confiscating the assets of the accused, the accused will need to prove that the assets were legally and not illegally acquired. This shifts the burden of proof from the prosecutor to the accused.

History has shown that the US is sometimes too hasty in its decisions or actions and later what it claims is proven incorrect, such as the Iraq WMD case as one example. The fact that yesterday’s Department of Justice press conference spoke about suspicions that need to be further investigated shows that the matter is not yet conclusive and we are yet to know what will be the final outcome. So we need to wait and see what happens although we do know at this stage it has no direct impact on 1MDB.